RTX's $289 Billion Backlog, Explained - The Motley Fool
Summary
RTX posted 14% year-over-year revenue growth to $24.7 billion in the second quarter, with adjusted earnings per share rising 21% to $1.89. The company's backlog surged 22% year over year to reach $289 billion, driven by a seven-year contract worth $22.9 billion for Tomahawk cruise missiles. This massive order book, which includes 60% from commercial aerospace and 40% from defense, suggests a robust sales pipeline for the coming years. The company's latest guidance projects $95 billion to $96 billion in sales for the full year.
Key points
- RTX's backlog grew 22% year over year to $289 billion in the second quarter.
- 60% of the backlog comes from commercial aerospace, while 40% comes from defense orders.
- The company secured a seven-year contract worth $22.9 billion to provide Tomahawk cruise missiles.
- Revenue rose 14% year over year to $24.7 billion, and adjusted EPS increased 21% to $1.89.
- Guidance calls for $95 billion to $96 billion in sales for the full year.
Timeline
Revenue rose 14% year over year to $24.7 billion, and adjusted EPS increased 21% to $1.89.
Backlog increased 22% year over year to reach $289 billion.
Secured a seven-year contract worth $22.9 billion for Tomahawk cruise missiles.
Guidance projects sales between $95 billion and $96 billion.
“The company's backlog is actually meaningfully diversified, and the backlog suggests a strong sales outlook in the coming years.”
Background
RTX is one of the world's largest defense companies by revenue and operates a commercial aerospace division.
Why it matters
A massive and diversified backlog, along with a major new contract, indicates strong future revenue potential.
What's next
The company's guidance for $95 billion to $96 billion in sales this year reflects confidence in continued growth.